PROVIDE Project Technical Paper 2005:1
principal loan amount rather than the capital component of the monthly instalment. It was
decided to set both the capital and interest components to zero.
February 2005
|
P030~0501 |
P0~050101 |
P0~050102 | |
|
8321. |
0 |
1250 |
0 |
|
9756. |
0 |
6 |
0 |
|
10835. |
0 |
6 |
0 |
|
11483. |
0 |
0 |
10 |
|
13537. |
0 |
0 |
30 |
|
14058. |
0 |
1 |
0 |
|
14231. |
0 |
98000 |
0 |
|
14242. |
0 |
100000 |
0 |
|
14243. |
0 |
130000 |
0 |
|
14244. |
0 |
180000 |
0 |
|
14248. |
0 |
70000 |
0 |
|
14253. |
0 |
150000 |
0 |
|
17011. |
0 |
350000 |
0 |
|
17673. |
0 |
60000 |
0 |
|
19250. |
0 |
75000 |
0 |
|
19255. |
0 |
49000 |
0 |
|
19289. |
0 |
1550 |
0 |
|
22106. |
0 |
3 |
0 |
|
22246. |
0 |
13 |
0 |
|
22401. |
0 |
8 |
0 |
|
22486. |
0 |
0 |
6 |
|
22623. |
0 |
6 |
0 |
|
24638. |
0 |
15000 |
0 |
The type 2 errors include those observations for which the calculated total differs with
R100 or less from the actual reported total. Of the 1213 errors 149 households fall into this
category. It is assumed that this relatively small error is a calculation error.36 The total is
therefore simply recalculated.
About 846 households only reported a total monthly instalment and provided no
breakdown. Missing values are constructed or estimated given the available information on
the average breakdown of those respondents that did provide all the information relating to
repayment of bonds. Prior to the correction of errors a total of 816 households correctly
reported their monthly instalments. An average capital payment of R1031 (55%) and an
average interest payment of R839 (45%) were reported, giving a total of R1870 per month.37
This breakdown will be assumed for the 846 households that only reported a total monthly
repayment.
The remaining 195 households have a range of problems that are not always easily
identifiable. However, the most important problem in this group of households is an
36 The average monthly instalment reported by the 1897 bonded homeowners is R1691 (after correction of error
types 1 - 4). The +/-R100 error boundary represents an error of less than 6%.
37 The average repayment roughly relates to a principal loan amount of R133000, assuming a bond period of 20
years and an interest rate of 16% per annum. The specific capital-interest composition would be reached
after about 16 years, irrespective of the principal amount. One would expect the average period lapsed to
be closer to 10 years. However, given that most South African bonds have an ‘access bond’ facility
whereby additional funds can be paid into the account to reduce the capital outstanding, the result is
understandable. The principal also seems realistic given that these amounts were borrowed approximately
10-16 years prior to 2000 and the average house prices prior to 1990.
43
© PROVIDE Project
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